Long-Term Net Lease Industrial Assets in Solid Texas Metros Equal Buyers
During the past few months, there has been a flight to quality and stability in the net lease marketplace for well-constructed long-term net lease industrial properties in solid Texas metros on the part of investors.
FORT WORTH—Not only does Fort Worth sit near the top of the fastest-growing construction markets, but net lease properties continue to attract interest throughout all solid Texas markets. One recent sale fits that description.
A single-tenant 18,561-square-foot industrial building leased to HERC Rentals Inc. was sold by Dallas-based developer Mohr Capital. The buyer of 4901 Carey St. was a California-based private investor as a part of a 1031 exchange.
Zach Harris and Brad Pepin of Stan Johnson Company exclusively represented Mohr Capital.
“This was a very successful transaction for all parties involved,” said Harris, a Director in Stan Johnson Company’s Tulsa office. “The seller, who originally developed the project, delivered a high-quality build-to-suit facility for the tenant that is now being replicated as a new prototype for HERC Rentals moving forward. For the buyer, it was a great opportunity to acquire a newly constructed industrial outdoor storage property leased to a top-three nationwide equipment rental company on a long-term triple net basis in one of the fastest growing and strongest construction markets in the US.”
Mohr Capital completed the development for HERC Rentals in 2018 to feature outdoor equipment storage yard areas. With direct frontage and visibility to Interstate 820 and Highway 287, the property is located on 6.15 acres in a dense industrial corridor just seven miles southeast of downtown Fort Worth. Notable industrial users in the area include FedEx Ground, Old Dominion Freight Line and UPS Freight. There were 13 years left on the tenant’s triple net lease as of the time of sale.
“The net lease industrial investment market in Texas continues to remain particularly strong, perhaps increasing in demand since the onset of the COVID-19 pandemic,” Harris tells GlobeSt.com. “The last few net lease industrial transactions that we have completed in Texas all received a great deal of interest during the marketing process and multiple competitive offers received on each. Over the past few months, we’ve seen a flight to quality and stability in the net lease marketplace overall. Well-constructed, long-term net lease industrial properties in solid Texas metros certainly meet that criteria for a large contingent of in-state and out-of-state investors.”
According to JLL research, Dallas-Fort Worth is indeed one of the most active industrial markets in the country. Demand has been keeping up with new supply, with 13.4 million square feet of net absorption and 16.2 million square feet of space delivered through the first half of 2020. Vacancy rates are even with the 10-year average of 7.5%, while leading the country in construction activity.
In second quarter 2020, 22.6 million square feet of space was under construction with nearly 40% located in the North Fort Worth submarket alone. More than 20 million square feet has been under construction each quarter since first quarter of 2016, says the JLL report.